Daniel Hansen, president, CEO and director ofSummit Hotel Properties Inc. (NYSE: INN), joined REIT.com for a video interview at REITWorld 2012: NAREIT's Annual Convention for All Things REIT at the Manchester Grand Hyatt in San Diego.
Summit Hotel Properties' primary focus is on acquiring and owning premium-branded, limited-service and select-service hotels in the upscale and upper midscale segment of the U.S. lodging industry. The lodging REIT's current portfolio includes 82 hotels in 21 states.
Hansen said that while there are advantages to having clusters of acquisitions in areas where the company already has a strong presence, he believes that every acquisition must stand on its own.
"With several of our more recent acquisitions, some of those are in new markets. They are markets in which we are keen to expand in with the brands we grow with, but it's not an exclusive, needs-to-be-in-a-cluster versus not-in-a-cluster," Hansen said.
Hansen points to low interest rates as being one other the key benefits to underwriting and acquisitions within the hotel sector. However, he pointed out that the slow and steady pace of the recovery has been a big benefit to the company, in that it has created a longer window of opportunity for Summit to find "great acquisitions at great cap rates across the country."
Prior to its initial public offering, Summit operated its own properties. The company sold the management part of its business and is now an asset manager.
"So, you can imagine having run our own property and now being asset managers, we're in the market very aggressively," Hansen said. "We're very careful about the management companies we choose and very aggressive about the process in which we manage. We are big believers that you get what you inspect, not what you expect."
As the end of 2012 approaches, Hansen said he expects the dominant trend in the lodging industry to favor the upscale and upper midscale hotels.
"The value proposition by our hotels is comparable to many full-service hotels. Having spent a lot of capital renovating, we believe that our space has a comparable experience," he said.